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Pentagroup ignored DV letter in March... now sending documents in JUne

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A "hardship" plan is a bad idea.  You never do payments on a collection account - you will never be paying on principal, but fictitious fees and interest.  It's either settlement in full or nothing.  

 

I agree with this statement when we're talking about a long-term approach. A charge-off will not be remedied until it's fully resolved. So if it takes you 4 years to pay off a charge-off, your credit won't begin to fully rehabilitate until the final payment is made. It generally takes 2 years from there to acquire new unsecured credit again. So in this example it's a 6 year process. 

 

However, in Bkbob's situation, in an effort to keep the account in a position to where Bkbob will most likely obtain his best possible settlement 6 months from now; a hardship payment plan is advisable.  

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I agree with this statement when we're talking about a long-term approach. A charge-off will not be remedied until it's fully resolved. So if it takes you 4 years to pay off a charge-off, your credit won't begin to fully rehabilitate until the final payment is made. It generally takes 2 years from there to acquire new unsecured credit again. So in this example it's a 6 year process. 

 

However, in Bkbob's situation, in an effort to keep the account in a position to where Bkbob will most likely obtain his best possible settlement 6 months from now; a hardship payment plan is advisable.  

Why would a hardship plan increase chances of settlement?  I don't follow the logic.  

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@jared_strauss

 

 

I agree with this statement when we're talking about a long-term approach. A charge-off will not be remedied until it's fully resolved. So if it takes you 4 years to pay off a charge-off, your credit won't begin to fully rehabilitate until the final payment is made. It generally takes 2 years from there to acquire new unsecured credit again. So in this example it's a 6 year process. 

 

However, in Bkbob's situation, in an effort to keep the account in a position to where Bkbob will most likely obtain his best possible settlement 6 months from now; a hardship payment plan is advisable.  

 

While the highlighted phrase is correct in regard to future collection efforts, it's not correct in regard to a credit report.

 

@bkbob63

 

In my opinion, you're willingness to settle depends upon your goal.  Are you trying to avoid a lawsuit?  Or are you trying to improve your credit rating?

 

If you're trying to avoid a lawsuit (considering the debt is still well within the SOL), your decision might depend upon the remedies available to the JDB if you lose a lawsuit.  Do you have wages that could be garnished?   Could they put a lien on your property?  If so, for how long?

 

Depending upon the above, settlement could be a viable option.  However, I'm not sure I would agree to a long-term payment plan.  If you could afford a 3-month payment plan, that might work.  But I would not agree to a long-term payment plan with a JDB.

 

If you agree to anything, just make sure you get every detail in writing.  Once an agreed upon amount is paid, the debt should be considered "paid in full". 

 

Another member has a thread regarding an account settled by her aunt with a JDB.  The JDB sold the settled account to another JDB.  That's why you want specifics in an agreement.   The member's aunt now has an FDCPA violation against the JDB who sold the settled account.

 

If you're trying to improve your credit rating, a settlement does not necessarily accomplish that desire.  A negative entry on your CR is just that...a negative entry.  There is no guarantee that your credit rating will rise simply because a negative entry includes a statement that a debt has been "paid in full".

 

That being said, if a potential creditor actually reads the details of a negative entry (or you point it out) and notes that you settled the account, it may provide that potential creditor with a more favorable view of your credit worthiness.  BUT, if that creditor has specific guidelines to follow, his opinion may not matter.

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To be honest, right now, I could care less about credit score.  I want to address the debt once I have the means to.

By any means necessary I am simply looking to delay and prefer no court.  Of course, I want to be certain they own the debt, though I am pretty sure they do since the timeline and balance goes from the OC then over to the JDB., but let them show me documentation noting it is so.  If that is a tactic I can use to stall while I gather funds to settle, so be it.  If they move on, even better.

 

At this point, it sounds as if a DV won't do anything since I received a Second Notice, but can't hurt either as it may show I am not just lying down and giving them the default judgment they seek.

So I am going to send one.  If they do sue, I will need to be cognizant of next step, again in the hopes of stalling.  I'd rather not have anything at all to do with a suit, but I am not clear if I am doing myself any favors by setting up any payment plan if my goal is settlement in 6 months.  If I can be confident to have ability to drag out any potential suit 6 months, I'd say I am OK with it. In that time I can save up enough for an offer to settle starting with a very lowball offer (10%) as admin noted in an above post.

 

So I am sending a DV as what sounds like a formality.  Coping mentioned sending a cease and desist.  Is this something advisable now or wait until or if they answer my DV?

Also, if I am sending a cease and desist, is there a sample letter someone can quickly point me too?  I will start searching the site as well, just asking in case someone has somewhere to point me to off hand.  I will model it after the comments coping made.

 

Thanks all.

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So I am sending a DV as what sounds like a formality.  Coping mentioned sending a cease and desist.  Is this something advisable now or wait until or if they answer my DV?

Also, if I am sending a cease and desist, is there a sample letter someone can quickly point me too?  I will start searching the site as well, just asking in case someone has somewhere to point me to off hand.  I will model it after the comments coping made.

 

Thanks all.

http://www.creditinfocenter.com/forms/sampleletter7.shtml

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Your choice. 

 

If you did not send a DV within 30 days of them first contacting you, the FDCPA permits them to continue collection efforts.  If its beyond 30 days, they can continue trying to collect...including filing suit.

 

If you send a C&D, they are permitted one more call to tell you what their intentions are...which may be filing suit.

 

If the original agreement included an arbitration clause, you can send them a letter invoking that.

 

Any of the three choices may encourage them to move on to easier prey...only arbitration is guaranteed to delay. 

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Thanks for the speedy reply!

Not to beat a dead horse but... , DV first and wait and see?

Or cease and desist now?

And can I send a cease and desist after they file suit?

I was given until July 5th to respond to Second Notice.

 

Thanks again!

I'd send a DV just to see what they say.  if they don't respond, then you can send a C&D letter. 

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Why would a hardship plan increase chances of settlement?  I don't follow the logic.  

 

I addressed that in my previous replies: 

 

"The idea behind entering into a hardship plan is to ensure that your account won't be referred to a local attorney for suit while you're saving up your money to settle. Typically speaking, they are less negotiable on accounts that they are litigating due to the perceived leverage they have. 

 

And in your situation, since the collection agency is also the debt buyer, they potentially may be even more less negotiable if the account is placed with a local attorney since they'll have to pay that local attorney approximately 30% of what they collect from you as a contingency. This is a cost that they wouldn't have if they keep the account in-house."

 

"It is more profitable for a JDB to enter into a settlement as opposed to 25 - $50 payments.

 

The reasons why are:

 

  • They can turn around and buy more accounts with the settlement they've collected from you. If you do the math and compare 25 - $50 payments to a settlement that will generate additional buying power: it's a no-brainer for them. 
  • They no longer have servicing costs as your debt would be fully resolved. Where as with the small payment option, they have to continually follow up with you.  
  • Most debt buyers buy their debts with a line of credit. This line of credit has an interest rate that eats into their margins. The longer the debt remains fully unresolved the less profit they make due to the interest that they pay."
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@jared_strauss

 

While the highlighted phrase is correct in regard to future collection efforts, it's not correct in regard to a credit report.

 

@bkbob63

 

If you're trying to improve your credit rating, a settlement does not necessarily accomplish that desire.  A negative entry on your CR is just that...a negative entry.  There is no guarantee that your credit rating will rise simply because a negative entry includes a statement that a debt has been "paid in full".

 

That being said, if a potential creditor actually reads the details of a negative entry (or you point it out) and notes that you settled the account, it may provide that potential creditor with a more favorable view of your credit worthiness.  BUT, if that creditor has specific guidelines to follow, his opinion may not matter.

 

 

Most creditors, and pretty much all A lenders won’t lend to you until ALL of your delinquencies are resolved…
 
Generally, within 2 years of resolving all of your delinquencies (including resolution via Chapter 7 bankruptcy), you will begin to acquire new unsecured credit again. My clients have reported their experiences ranged from 6 – 18 months after completing my service. But assume two years, to be safe.
 
Anyway, it will be like you’re 18 again. You’ll start off with department store cards, typically with $300 – $500 credit limits. Then you’ll grow your credit again from there.
 
You could also possibly accelerate your rehabilitation by obtaining a few secured credit cards that report to your credit report.
 
Then, the key to acquiring desirable financing in the future is to maintain at least 3 active tradelines. It’s imperative to have at least 3 accounts reporting active payment history. Maintain small balances (like $100) on them and just pay the minimums.
 
This is generally when your credit score will begin to noticeably increase.

 

Will my credit score increase due to other reasons as well?
 
It generally will. Your credit score is determined by a variety of factors, but the one that is relevant to paying or settling collections and charge offs is your outstanding balances. FICO generates 30% of your credit score by accessing your outstanding balances.
 
When you payoff or settle collections and charge offs, you eliminate the balances, thus impacting your score in that manner as well.
 
What about buying a home in the future?
 
Once all of your delinquent accounts have been satisfied for 2 years, you will generally qualify (credit-wise) for a conventional mortgage, providing that you don’t have any lates on your mortgage history.
 
And if you wanted to buy or refinance via FHA, you should generally qualify (credit-wise) after 12 months. Assuming again that you don’t have any mortgage lates.
 
If you choose to resolve your debts by way of Chapter 7 bankruptcy, you will generally qualify (credit-wise) for an FHA loan after 2 years of discharge. Chapter 7 bankruptcies generally discharge around 90 days after filing. However, you must establish some credit history in those two years without any delinquency.
 
Also, if your bankruptcy resulted from conditions outside of your control, such as the death of your spouse, serious illness or natural catastrophe, you may be able to qualify 12 months after your discharge date.

 

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I addressed that in my previous replies: 

 

 

"It is more profitable for a JDB to enter into a settlement as opposed to 25 - $50 payments.

 

That didn't address my question.  You seem to imply that it's more likely he won't get soon.  You didn't address why he'd be more likely to get a settlement deal by making $25 - $50 payments vs.  not paying and saving up the money.  

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Most creditors, and pretty much all A lenders won’t lend to you until ALL of your delinquencies are resolved…
 
Generally, within 2 years of resolving all of your delinquencies (including resolution via Chapter 7 bankruptcy), you will begin to acquire new unsecured credit again. My clients have reported their experiences ranged from 6 – 18 months after completing my service. But assume two years, to be safe.
 
Anyway, it will be like you’re 18 again. You’ll start off with department store cards, typically with $300 – $500 credit limits. Then you’ll grow your credit again from there.

 

I know of no credit cards other than secured cards that will lend 2 years after a BK.  

 
 
 

 

What about buying a home in the future?
 
Once all of your delinquent accounts have been satisfied for 2 years, you will generally qualify (credit-wise) for a conventional mortgage, providing that you don’t have any lates on your mortgage history.
 
And if you wanted to buy or refinance via FHA, you should generally qualify (credit-wise) after 12 months. Assuming again that you don’t have any mortgage lates.
 
If you choose to resolve your debts by way of Chapter 7 bankruptcy, you will generally qualify (credit-wise) for an FHA loan after 2 years of discharge. Chapter 7 bankruptcies generally discharge around 90 days after filing. However, you must establish some credit history in those two years without any delinquency.
 
Also, if your bankruptcy resulted from conditions outside of your control, such as the death of your spouse, serious illness or natural catastrophe, you may be able to qualify 12 months after your discharge date.

 

 

I'd like to see conventional mortgage lenders that will accept paid collections, late pays on credit card and bankruptcies, especially after only 2 years.  I know of no lender, not even FHA that will take credit like this.  

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I know of no credit cards other than secured cards that will lend 2 years after a BK.  

 
 
 

 

I'd like to see conventional mortgage lenders that will accept paid collections, late pays on credit card and bankruptcies, especially after only 2 years.  I know of no lender, not even FHA that will take credit like this.  

 

 

 

Well then Admin, I suggest that you pick up your phone and call 3 random mortgage brokers and ask them. And then come back and let us know what you found out. Thanks. 

 

In regard to credit cards after bankruptcy: this is a very informative post - http://money.msn.com/credit-cards/after-bankruptcy-new-credit-cards

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That didn't address my question.  You seem to imply that it's more likely he won't get soon.  You didn't address why he'd be more likely to get a settlement deal by making $25 - $50 payments vs.  not paying and saving up the money.  

 

If he enters into a payment arrangement the account would stay with PRA instead of possibly going to a local collection attorney. 

 

Most accounts that go to a local collection attorney are less negotiable than if they were still with a collection agency or a debt buyer. Furthermore, it is likely that if they file suit that Bkbob would be assessed attorneys fees, court costs, and post charge-off interest (if they haven't assessed post charge-off interest already). 

 

So when you combine the fact that his balance may go up, with the history of what local collection attorneys settle for, it's an absolute no-brainer to enter into a 25-$50 a month payment plan to ensure that it is prevented from happening while he saves up his funds to settle over the next 6 months.

 

Spending $150 - $300 over 6 months while saving the funds to settle is well worth it to minimize this risk.

 

Especially when they have already sent a letter to Bkbob explaining that they may send it out to a local attorney.

 

But hey, I just happen to own a debt relief company that has the highest success rate in the entire debt relief industry. What do I know? 

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If he enters into a payment arrangement the account would stay with PRA instead of possibly going to a local collection attorney. 

That still doesn't address my question of how that makes a settlement more likely.  

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Sorry, no.  The most successful debt fixer in the industry is the guy that was on here a couple years ago spouting the same gibberish as you...and then absconded with several million dollars of his "clients" money without paying their creditors.

 

Hi Willing,

 

First of all, I never have and never will have access to my clients funds. My clients pay their settlements directly to their creditors from their own accounts. The only funds that are sent to me are for my fees. 

 

Secondly, this is not the first time that you have associated me with this type of criminal and fraudulent behavior. I view your words and your attempted association as slanderous and libel.

 

I will kindly ask that you refrain from making such baseless and irresponsible comments in an attempt to associate me with other people or companies that have stolen from people. I view your comments that are related to this as an attempt to harm my reputation; decrease respect, regard, or confidence; or induce disparaging, hostile, or disagreeable opinions or feelings against me and my company.

 

Thirdly, this post by Steve Rhode at getoutofdebt.org is by far the most comprehensive piece on debt relief success rates - http://getoutofdebt.org/7233/the-truth-about-the-failure-rates-and-completion-rates-of-credit-counseling-debt-settlement-and-bankruptcy

 

When I say that my company has the highest success rate in the debt relief space it's not some wild claim. It's a fact. And that post proves it. 

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That still doesn't address my question of how that makes a settlement more likely.  

 

Admin, 

 

I'm confused on how I haven't answered the question. How do these replies not address that? Please be more specific with your question.  

 

I previously stated...

 

"I have used this strategy successfully for years. 25 - $50 monthly payments will not impact your leverage at all. In fact, it will probably enhance it. 

 

The reason why is due to the time-value of your debt. It would probably take you many years to resolve the debt with those payment amounts. 

 

It is more profitable for a JDB to enter into a settlement as opposed to 25 - $50 payments.

 

The reasons why are:

 

  • They can turn around and buy more accounts with the settlement they've collected from you. If you do the math and compare 25 - $50 payments to a settlement that will generate additional buying power: it's a no-brainer for them. 
  • They no longer have servicing costs as your debt would be fully resolved. Where as with the small payment option, they have to continually follow up with you.  
  • Most debt buyers buy their debts with a line of credit. This line of credit has an interest rate that eats into their margins. The longer the debt remains fully unresolved the less profit they make due to the interest that they pay."  

And...

 

"If he enters into a payment arrangement the account would stay with PRA instead of possibly going to a local collection attorney. 

 

Most accounts that go to a local collection attorney are less negotiable than if they were still with a collection agency or a debt buyer. Furthermore, it is likely that if they file suit that Bkbob would be assessed attorneys fees, court costs, and post charge-off interest (if they haven't assessed post charge-off interest already). 

 

So when you combine the fact that his balance may go up, with the history of what local collection attorneys settle for, it's an absolute no-brainer to enter into a 25-$50 a month payment plan to ensure that it is prevented from happening while he saves up his funds to settle over the next 6 months.

 

Spending $150 - $300 over 6 months while saving the funds to settle is well worth it to minimize this risk.

 

Especially when they have already sent a letter to Bkbob explaining that they may send it out to a local attorney.

 

But hey, I just happen to own a debt relief company that has the highest success rate in the entire debt relief industry. What do I know?"

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First of all, I never have and never will have access to my clients funds. My clients pay their settlements directly to their creditors from their own accounts. The only funds that are sent to me are for my fees. 

 

Secondly, this is not the first time that you have associated me with this type of criminal and fraudulent behavior. I view your words and your attempted association as slanderous and libel.

 

I will kindly ask that you refrain from making such baseless and irresponsible comments in an attempt to associate me with other people or companies that have stolen from people. I view your comments that are related to this as an attempt to harm my reputation; decrease respect, regard, or confidence; or induce disparaging, hostile, or disagreeable opinions or feelings against me and my company.

 

Gee, I'm sorry...struck a nerve, did I?  I'll be more careful in the future.

 

But, an endoresment from an organization devoted to debt fixing doesn't carry much weight with me...

 

And, how do you guarantee your clients actually pay you?  Do you sometimes have to put your "collector of the year" hat back on?

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